Soo-eun vs Mubo, Signs of Escalating Conflict Over External Debt Guarantees

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[Asia Economy Reporter Kim Jin-ho] The conflict between the Export-Import Bank of Korea (KEXIM) and the Korea Trade Insurance Corporation (K-sure) over "external debt guarantees" is showing signs of intensifying. The K-sure labor union is reportedly planning to file a petition for a national audit with the Board of Audit and Inspection and proceed with criminal charges as early as this week, while the KEXIM labor union has also announced a countermeasure. This is interpreted as a sign that they will no longer tolerate K-sure’s sudden "stubbornness" over an issue that has already been fully agreed upon between government ministries.

On the 27th, Shin Hyun-ho, chairman of the KEXIM labor union, said, "If K-sure proceeds with criminal charges against KEXIM employees following the national audit petition to the Board of Audit and Inspection, we are internally reviewing legal responses (from KEXIM) as well."

External debt guarantees are a system that guarantees debt when foreigners importing domestic goods borrow purchase funds from domestic or foreign financial institutions. This system has been practically handled exclusively by K-sure, which separated from KEXIM in 1992. According to the Enforcement Decree of the KEXIM Act, the total amount of KEXIM’s external debt guarantees cannot exceed 35% of K-sure’s annual insurance underwriting amount.

The conflict between the two institutions arose after the Ministerial Meeting on External Economy on the 13th. The Ministry of Economy and Finance passed a proposal to amend the Enforcement Decree of the KEXIM Act to raise the total external debt guarantee limit ratio from 35% to 50%, which the K-sure labor union opposed. At that time, the Ministry of Economy and Finance stated that there were at least four cases where overseas orders were canceled due to the restrictions of the KEXIM Enforcement Decree, estimated at $12.1 billion.

The K-sure labor union issued a statement saying, "The report on the mentioned projects was falsely prepared," and "We will file a petition for an audit and criminal charges against the KEXIM employees who prepared it."

Following a request for an employee audit to KEXIM’s audit office on the 22nd, the K-sure labor union is also expected to proceed with a national audit petition to the Board of Audit and Inspection and criminal charges as early as this week. The K-sure labor union’s position is that their unique duties have been infringed upon by information falsely prepared by KEXIM employees.

The KEXIM labor union, which had maintained a non-response strategy until now, has also announced a counterattack. This is based on the judgment that K-sure’s media play has gone too far. In particular, there are concerns about naming the employees who prepared the report and disclosing information about companies whose overseas orders were canceled, which was discussed at the confidential Ministerial Meeting on External Economy, to the outside.

Chairman Shin said, "I have felt burdened by the subordinate institutions showing proxy war patterns over matters agreed upon between government ministries," but added, "However, since they are greatly exaggerating false facts, misleading the public, mentioning employees’ real names, and threatening criminal charges based on this, the KEXIM labor union will also consider appropriate legal responses."

This content was produced with the assistance of AI translation services.